Baroness Longfield will be joined by panellists Zoe Billingham CBE, a former inspector at HM Constabulary, and Eleanor Kelly CBE, former chief executive of Southwark Council, to lead the inquiry.
Mahmood said Longfield and the two panellists had been recommended by Baroness Casey following “recent engagement with victims” and would meet survivors later this week.
On her appointment, Baroness Longfield said the inquiry “owes it to the victims, survivors and the wider public to identify the truth, address past failings and ensure that children and young people today are protected in a way that others were not”.
The inquiry will comprise a series of targeted local investigations into the group-based child sexual exploitation of girls by grooming gangs, overseen by a national panel.
Mahmood said one of these would be in Oldham, Greater Manchester, with the other locations to be decided.
No area will be able to “resist” a local investigation during the inquiry, she added, which would last three years with a budget of £65m under draft terms of reference.
The inquiry will also “specifically” consider the backgrounds of offenders, including their ethnicity and religion.
Conservative leader Kemi Badenoch said progress on the inquiry was welcome but survivors have been waiting too long for an inquiry they can trust.
“They have been ignored, dismissed and made to feel invisible. They are the ultimate judges of whether this inquiry is credible,” she said.